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Commissioner Doyle votes to allow the Port Authority of New York and New Jersey, the Ocean Carrier Equipment Management Association, and all of its individual carrier members to discuss the cargo facility charge

June 22, 2017

FMC Votes on Port Authority of New York and New Jersey (PANYNJ) – Ocean Carrier Equipment Management Association (OCEMA) Discussion Agreement related to the Cargo Facility Charge

  • PANYNJ and OCEMA members are sophisticated parties and should be allowed to meet and discuss the cargo facility charge effective immediately
  • The government should get out of their way so they can get on negotiations
  • The FMC’s time would be better well spent addressing other matters such as chassis pooling problems and detention and demurrage issues that detrimentally affect American businesses including exporters, beneficial cargo owners (BCOs), truckers and the shipping public.

Under the proposed discussion agreement, the Port Authority of New York and New Jersey (PANYNJ), the Ocean Carrier Equipment Management Association (OCEMA), and all of its individual carrier members, are seeking permission to discuss and reach agreement on matters related to the cargo facility charge (CFC) that PANYNJ implemented in 2011. Specifically, the parties want to sit down and discuss the potential for an alternative billing and collection system for the CFC. I am not in favor of delaying implementation of this agreement any further. PANYNJ and OCEMA are sophisticated parties and should be allowed to meet and discuss the CFC effective immediately, and the government should get out of their way so they can get on with their discussions. To be sure, if jointly operated programs are to be undertaken, then the parties would be required to file an amendment with the Commission for further review and analysis prior to possible implementation.

It is important to point out significant investments undertaken by the PANYNJ over the past decade. These investments have benefitted all stakeholders including shippers, BCOs, marine terminals operators and the ocean carriers. The investments were not funded or financed by the monies from the CFC even though the wider shipping public benefitted nonetheless. A main focus of these improvements is to expedite the movement of containers on and off the ocean carriers and enhance movement in and around New York and New Jersey’s ports. They include:

  • Harbor Deepening project ($1.1 Billion);
  • Raising of the Bayonne Bridge ($1.6 Billion); and
  • Other capital needs ($1.3 Billion)

The CFC itself is also being used to benefit the wider shipping public. The CFC is a cost recovery mechanism that funds specific critical port roadway, rail, and security projects that benefit port users and the region. Again, a major benefit of these projects centers around expediting operations related to the ocean carriers.

To this point, the CFC has been used for reimbursement of the following completed projects:

  • ExpressRail (Elizabeth, Newark & Staten Island);
  • McLester St. Curve and Widening;
  • Port St. & Brewster Rd. Connector;
  • Howland Hook Marine Terminal Tracks 6&7; and
  • Certain Post 9/11 Incremental Security Costs.

In early 2017, the Port Authority Board of Commissioners approved a 10-year Capital Plan (2017-2026). Within that plan are four (4) projects that will be incorporated into the CFC once they are completed and the additional capacity comes on line:

  • ExpressRail at Greenville Rail Yard (ICTF);
  • Port St. Corridor Improvements;
  • Port Jersey Access; and
  • ICTF Off-site Improvements.

Therefore, I vote to take no further action and allow the PANYNJ and OCEMA to begin discussions under this proposed agreement. Should the Federal Maritime Commission have further questions during the life of this discussion agreement, we should seek answers to those questions pursuant to the Commission’s authority to monitor agreements. Our time would be better well spent addressing other important matters at the Commission such as chassis pooling problems and detention and demurrage matters that detrimentally affect American businesses including exporters, shippers, truckers and the shipping public.

William P. Doyle is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not necessarily represent the position of the Commission.